The Supreme Court of Vermont Law Blog: An on-going conversation about the practice of law in Vermont, featuring summaries of Vermont Supreme Court decisions, a dollop of lampooning, legal analysis, and a charming aggregation of creative thought.

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Friday, March 11, 2016

Pay Gap

There’s that great bumper sticker that says “feminism is the radical notion that women are people.” I know, you read that and chuckle and think, “of course women are people.” But a lot of time went by where the general societal thought was that women kind of weren’t exactly people, so it was ok to treat them/us unfairly. That it’s 2016 and we’re still having a conversation about whether women should be paid the same as men makes me want to throw things. The fact we’re talking about it means there are still people who think that women shouldn’t be paid the same as men. Those people need to get kicked in the shins.

Let’s make an egregious example. Say two high school juniors, neither of whom have ever had a job, both go to a fast food joint to apply for after-school work. The manager hires them both, they work the same hours during the same shift, and have similar performance. The manager can’t give Boy Worker $10 per hour and Girl Worker $8 per hour just because Boy is a boy and Girl is a girl. This seems pretty obvious.

Things get trickier as potential employees progress in their careers, because people apply for positions with different backgrounds, experience, and education. Let’s pretend for a second I apply for an attorney job and so does a young male attorney. Let’s pretend he has had a couple internships, but that this is his first actual job out of law school. I’ve been practicing more than ten years. It’s reasonable to think that I would be paid more than he because of our relative experience levels.

Things get much more complicated than in these examples, though. That was the basis for this particular case. Back in 2003, the Vermont Department of Corrections constructed and opened the Southern State Correctional Facility, or Chez Springfield, as I frequently call it. They needed to hire someone to manage the kitchen and food service. They got nine qualified applicants, eight of whom were men. They interviewed three (there’s a footnote in the opinion that explains why only three people were interviewed), and ultimately hired John Doe. John Doe had relevant degrees in Hotel and Restaurant Administration, Culinary Arts, and Restaurant Management, and had been doing this kind of work for twenty three years. He was looking to leave a job in a hospital where he worked in a directorial position relative to food and other services.

The Department of Corrections decided to hire John Doe because he had relevant education, the most experience, and the highest interview score. He would have started the job at a certain salary step. However, they were getting down to the wire and needed to hire someone to run the kitchen right away. The jail was about to open in a month, and they didn’t have anybody to manage the kitchen. The superintendent applied to the State’s HR department to get permission to hire John Doe at a higher step based on John Doe’s education and experience, and because it was vital they hire someone right away. HR approved the request the very next day and John Doe was hired at the higher step and pay grade.

A few years later, John Doe applied internally for a business manager position. In the meantime, his salary had increased consistent with his collective bargaining agreement. When he applied for the new position, he was at a particular step, and was hired for the business manager and paid consistent with his salary step.

It later comes out that there were three other people doing business manager jobs, all women, and who were paid considerably less than John Doe – somewhere in the range of $6000-$10,000 per year less. Nobody disagrees with those facts. And also, on their face, these facts would probably make someone stop in their tracks and say, “Wait a second. What the heck is going on here?”

The three women filed suit against the State, arguing that there was no reason there should be this kind of disparity. They argued that they were doing exactly the same job as John Doe, and the fact that he was paid considerably more than they were was discrimination. The State argued that was not the case. The trial court ruled that the plaintiffs had made an initial showing of discrimination under the Vermont Fair Employment Practices Act, but that the State had a defense; John Doe’s hiring and salary was not based on gender, it was based on other factors about him, like his education and experience. The court granted summary judgment to the State.

The plaintiffs appealed, and SCOV agreed to uphold the finding of summary judgment. Summary judgment happens where the moving party shows that there is no genuine issue of material fact and where the moving party is entitled to judgment as a matter of law.

SCOV totally gets it that the universe is just now catching on to the idea that women are people and ought to be paid the same as men. The Vermont legislature gets it, too; they passed the Vermont Fair Employment Practices Act, which prohibits an employer from paying employees disparate wages based solely on their gender. But, the Act also recognizes that there are going to be details about different employees that could cause it to be completely acceptable for one person to be paid more than the other. This is okay to do, so long as the reason for the disparate pay is for an actual reason and not because of the sex of the employee.

There is also a similar federal statute, and unsurprisingly, there’s a fair amount of case law about equal pay for equal work. Courts have developed a method for handling these cases. First, the plaintiff has to make an initial showing that the employer pays different wages to employees of different sexes, even if they are doing the same work under the same conditions.

At that point, the burden shifts over to the employer to show one of the four available affirmative defenses. The defenses are explanations for differences in pay. They are (a) senority system; (b) a merit system; (c) earnings based on quantity or quality of production; or (d) any other difference that is not based on the sex of the employee. The employer has to be able to pony up some actual information to persuade the court that its pay system is based on one of those factors. If they can’t do that, it can look like a “system” in place is just a pretext for sex discrimination. The employer has to present undisputed facts to show that there is no genuine issue about whether the difference in pay is based on something other than the sex of the employee.

The State raised the affirmative defense that there was a bona fide reason for the wage disparity. At the time John Doe was hired, he was given a higher salary than was advertised. This was done with permission because of the exigent nature of his hiring; a huge correctional facility was due to open in a month and they didn’t have anyone to oversee the kitchen. The salary had nothing to do with the fact he was a man; it had everything to do with his education, experience, and the circumstances. Federal courts in multiple circuits have agreed that these factors can be considered when there is a pay gap.

SCOV also points out that when John Doe was hired he came from a job that paid more. Had DOC not sought permission to pay him commensurate with his prior salary, he would have taken a huge pay cut. SCOV notes that caution has to be exercised when taking this factor into account because of the history of gender discrimination in pay. If every man who gets hired automatically gets a higher salary because he came from a higher salary, it perpetuates the hamster wheel of discrimination. That actually wasn’t the impetus for getting John Doe the higher salary when he first started, though, and it also doesn’t play a role here due to the other factors present.

The plaintiffs also argued that the trial court actually put the burden on them to show that no affirmative defense existed, rather than making the defendant prove the fact of the affirmative defense. SCOV disagrees. SCOV analyzed the trial court’s decision, and found that it followed the steps as required. SCOV found that first the plaintiffs set forth their prima facie case, and that the trial court said that the plaintiffs could set forth evidence to show that the justification the defense gave was actually pretext. SCOV says this is how the steps in this kind of case are supposed to work.

SCOV also rules that just because there is a disparity in pay for men and women doesn’t mean that unequal pay is being perpetuated by employers. There are legitimate reasons that people get paid differently, and it isn’t always discriminatory.

Plaintiffs also raised an issue with the “hire into range” process. Had John Doe been hired under different circumstances, he would have started in his pay grade at step one. However, at the time of hiring, DOC sought to have him hired into a higher range for all the reasons I have already explained. There is a rule that says when there’s a vacancy in a classified position within state government, the person doing the hiring is supposed to work to recruit someone within the classified service to fill that position. Plaintiffs said that DOC didn’t follow this procedure. The State said they did – that they offered the position to the most senior person available for the job but she didn’t want it. SCOV also addresses the fact that even if DOC didn’t follow the policy exactly, perfect compliance didn’t invalidate the legitimate business reasons for the decision made.

SCOV feels the problem that Plaintiffs encounter in making this argument, is that even if the hire-into-range policy wasn’t followed perfectly, it still doesn’t answer the question about whether, when John Doe was hired, there was a bona fide reason other than sex that caused the disparity in pay. Plaintiffs also tried to argue that there were other available people who could have been hired, some of whom could have been hired for less money. SCOV isn’t going to get involved in whether an employer actually made the best business decision; it’s just enough to show that the decision was a legitimate one.

So. This is all a lot of backstory to get us to the point of talking about the business manager job and why John Doe got paid more than his female counterparts doing the same job. John Doe got promoted to business manager, and when he did, slid over into that position at his current pay step and grade. John Doe was subject to a collective bargaining agreement, which defined roles for newly-hired employees and for employees who move between positions. The agreement says that an employee “who moves” to a supervisor position gets an 8% pay increase. The trial court looked at his historical pay increases and the increase he got for moving to his new position. The trial court felt that all the increases were due to legitimate factors other than that he is a man.

Because the State was able to show that it properly raised the affirmative defense of a bona fide reason other than sex, SCOV agrees that summary judgment was properly granted.